For many of us, the term “organized crime” brings to mind images, gathered from movies and televisions, of smoky back rooms where a boss is flanked by well-muscled thugs ready to enforce their own code of justice via brass knuckles or cement shoes. There are, however, many kinds of organized crime, including organized schemes focused on defrauding the Medicare and Medi-Cal programs. While the perpetrators may wear suits, or even doctors’ long-white coats, the crimes are still a serious threat and coming forward to report them still requires a brave individual. Our San Francisco qui tam lawyer is proud to work with such brave whistleblowers to bring an end to these costly schemes.

Convictions in Scheme Involving Dangerous Anti-Psychotic MedicationsLast month marked a major milestone in the fight against health care fraud, with the key convictions in the first case involving an organized scheme to profit from the filing of fake claims for anti-psychotic medications. As detailed in a Justice Department press release, the evidence showed that the operators and employees of Manor Medical Imaging in Glendale, California produced thousands of these false prescriptions. The conspirators used stolen identity information from elderly Vietnamese Medicare and Medi-Cal beneficiaries, military beneficiaries who’d taken part in drug rehab program, and “denizens of Skid Row,” creating false patient files to justify the need for high-cost anti-psychotic drugs. After the prescriptions were filled and paid for by either Medicare or Medi-Cal, they were sold on the black market and eventually used to fulfill new, wholly-separate claims, ultimately causing the health care programs to paying for the same drugs again.

Overall, the scheme generated more than $20 million in fraudulent billings, with Medicare and Medi-Cal actually paying out in excess of $8 million. The three conspirators who were convicted in February were: Dr. Kenneth Johnson, a doctor who pre-signed blank prescriptions and generally allowed the conspirators to use his name and credentials in exchange for money; Nuritsa Grigoryan, a medical practitioner not actually licensed in the U.S. who filled out the bogus prescriptions; and Artak Ovsepian who oversaw the actual acquisition of medications from pharmacies using the falsified prescriptions. They were convicted on charges including health care fraud conspiracy, making false statements to the federal government, conspiracy to misbrand medications, and charges relating to identity theft. The three are among a total of 16 convicted in the scheme thus far. One person was acquitted by the jury.

The Justice Department noted that the “prescription harvesting” scheme not only defrauded the health care systems, but also endangered public health by putting the old, re-used, and possibly adulterated or mis-branded medications back on the market. Making this even worse, the scheme involved particularly strong psychiatric medications that (along with being pricey) could be very dangerous if not used correctly.

The Critical Role of Whistleblowers and Qui Tam Lawsuits in the Health Care Fraud Arena
Whistleblowers, private citizens who come forward to report schemes such as that involving Manor Medical, are absolutely essentially to the fight against health care fraud. An article in Forbes magazine late last year cited a study that found cases initiated by whistleblowers led to the recovery of $20 billion in the five-year span from 2008 to 2012. Additionally, the article noted the important deterrent effect of such cases.

In recognition of the important role played by whistleblowers, the False Claims Act (the law typically used in health care fraud prosecutions) not only protects them from retaliation, but also rewards them with a share of any judgment won in cases that they file on the government’s behalf. Such cases, known qui tam suits, are one of Attorney Greg Brod’s specialties. We urge witnesses to call our California health care fraud law firm to discuss how we can work together in pursuit of justice.